Dow Chemical 2009 Annual Report Download - page 42

Table of Contents
Adverse conditions in the global economy and disruption of financial markets could negatively impact Dow’s customers and therefore Dow’s
results of operations.
A continuation of the economic downturn in the businesses or geographic areas in which Dow sells its products could reduce demand for these products and
result in a decrease in sales volume that could have a negative impact on Dow’s results of operations. In addition, volatility and disruption of financial
markets could limit customers’ ability to obtain adequate financing to maintain operations, which could result in a decrease in sales volume and have a
negative impact on Dow’s results of operations.
Weather-related matters could impact the Company’s results of operations.
In 2005 and 2008, major hurricanes caused significant disruption in Dow’s operations on the U.S. Gulf Coast, logistics across the region and the supply of
certain raw materials, which had an adverse impact on volume and cost for some of Dow’s products. If similar weather-related matters occur in the future, it
could negatively affect Dow’s results of operations, due to the Company’s substantial presence on the U.S. Gulf Coast.
Actual or alleged violations of environmental laws or permit requirements could result in restrictions or prohibitions on plant operations,
substantial civil or criminal sanctions, as well as the assessment of strict liability and/or joint and several liability.
The Company is subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution, protection of the
environment, and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. At
December 31, 2009, the Company had accrued obligations of $619 million ($312 million at December 31, 2008) for environmental remediation and
restoration costs, including $80 million ($22 million at December 31, 2008) for the remediation of Superfund sites. This is management’s best estimate of the
costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although the ultimate cost with
respect to these particular matters could range up to approximately twice that amount. Costs and capital expenditures relating to environmental, health or safety
matters are subject to evolving regulatory requirements and depend on the timing of the promulgation and enforcement of specific standards which impose the
requirements. Moreover, changes in environmental regulations could inhibit or interrupt the Company’s operations, or require modifications to its facilities.
Accordingly, environmental, health or safety regulatory matters could result in significant unanticipated costs or liabilities.
Local, state and federal governments have begun a regulatory process that could lead to new regulations impacting the security of chemical plant
locations and the transportation of hazardous chemicals.
Growing public and political attention has been placed on protecting critical infrastructure, including the chemical industry, from security threats.
International terrorism, natural disasters and political unrest in some areas of the world have increased concern regarding the security of chemical production
and distribution. In addition, local, state and federal governments have begun a regulatory process that could lead to new regulations impacting the security of
chemical plant locations and the transportation of hazardous chemicals, which could result in higher operating costs and interruptions in normal business
operations.
Increased concerns regarding the safety of chemicals in commerce and their potential impact on the environment have resulted in more restrictive
regulations and could lead to additional regulations in the future.
Concerns regarding the safety of chemicals in commerce and their potential impact on the environment reflect a growing trend in societal demands for
increasing levels of product safety and environmental protection. These concerns could manifest themselves in stockholder proposals, preferred purchasing
and continued pressure for more stringent regulatory intervention. In addition, these concerns could influence public perceptions, the viability of the
Company’s products, the Company’s reputation, the cost to comply with regulations, and the ability to attract and retain employees, which could have a
negative impact on the Company’s results of operations.
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